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[2012-1] Restoring Fiscal Soundness and its Influences on Monetary Policy

Research Department (Monetary & Fiscal Research Team +82-2-759-4193) 2012.02.01 3980



  The active operation of fiscal policy since the Lehman Brothers’ collapse is seen as having greatly contributed to the overcoming of the financial crisis, but it gave rise to the problem of a deterioration of fiscal soundness. Fiscal soundness being a nation’s overall debt servicing capacity, once impaired, its restoration involves a considerable length of time and sustained economic costs in addition to which there is a heightened risk of the

excessive volatility of macro-economic indicators such as prices and interest rates.


* Please see the attached file.